TABLE OF CONTENTS



Summary 

In short, AML/CFT stands for "Anti-Money Laundering and Countering Financing of Terrorism". 

Anti money laundering (AML) refers to laws, regulations, and procedures aimed at uncovering efforts to disguise illicit funds as legitimate income. 


Money laundering seeks to conceal crimes ranging from small-time tax evasion and drug trafficking to public corruption and the financing of groups designated as terrorist organisations.


AML legislation around the world, was a response to the growth of the financial industry, the lifting of international capital controls and the growing ease of conducting complex chains of financial transactions.


Only around 1% of the money being laundered around the world annually is being caught. It is estimated that illegally obtained funds valued at over $US1.6 trillion, is laundered worldwide each year through legitimate financial systems.


Things to note:

  • Anti Money Laundering (AML) efforts seek to make it harder to hide profits from crime.
  • Criminals use money laundering to make illicit funds appear to have a legitimate origin.
  • AML regulations require financial institutions to develop sophisticated customer due diligence plans to assess money laundering risks and detect suspicious transactions.


What does AML look like in different countries? 

Australian Legislation 

The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) is the main piece of Australian government legislation that regulates AUSTRAC’s functions. It is the Act imposed to minimise money being laundered. 


The Act ensures that businesses are taking appropriate measures to protect themselves and detect illegal activities. The cooenhances the reputation of individual businesses, and of New Zealand as a safe place in which to do business.


Check out acams.org and austrac.gov.au for additional information 




New Zealand Legislation

The AML/CFT Act 2009 places obligations on New Zealand's financial institutions, casinos, virtual asset service providers, accountants, lawyers, conveyancers and high value dealers to detect and deter money laundering and terrorism financing, by preventing the movement of illegally obtained funds and reducing financial crime.


The Act ensures that businesses are taking appropriate measures to protect themselves and detect illegal activities. This protects the reputation of individual businesses, and of New Zealand as a safe place in which to do business.


Check out http://dia.govt.nz/AML-CFT-Legislation for additional information 




United Kingdom Legislation 

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended)  requires Reporting Entities to put preventative measures in place to help tackle money laundering in the UK.

If you have engaged a reporting entity, according to the The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended) Regulation 27, before a reporting entity begins a business relationship with you, the reporting entity must conduct customer due diligence (CDD) on the beneficial owner(s) of the entity or arrangement or on whose behalf a transaction is being conducted. 


Check out https://www.legislation.gov.uk/uksi/2017/692/regulation/27#text%3DCustomer%20Due%20Diligence for additional information 




 Why is First AML contacting me rather than the firm I am engaged with?

 

The Financial Action Task Force (FATF) along with the World Bank and the IMF, identified 12 areas that have a higher risk of money laundering and financial terrorism. Any captured activity within the 12 areas, must be verified through the Customer Due Diligence (CDD) process. 

 

CDD involves understanding ownership structures of their client (e.g. individuals, companies or trusts) and conducting identity verification on all associated individuals. In the case of Companies and Trusts, these associated individuals may be Directors, Shareholders, Trustees or Trust Beneficiaries.